-- Posted Thursday, 3 December 2009 | Digg This Article | | Source: GoldSeek.com
Thursday, December 3, 2009
“Phenomenally accurate forecasts”
If America ever escapes from the current economic morass and decides to give capitalism a try, here’s a Wall Street Journal headline that suggests what we’ll be up against: Sharp’s New Plant Reinvents Japan Manufacturing Model. The article goes on to describe the $11 billion investment Sharp recently made in a huge manufacturing complex designed to keep Japan competitive with China and other Pacific Rim countries in the manufacture of liquid crystal display panels. The complex covers enough land to occupy 32 baseball fields and is viewed as the cutting edge of Japan’s efforts to compete in high-tech manufacturing against countries with a very significant wage advantage. Compare that to the $3 billion “investment” U.S. taxpayers recently made to stoke the Cash for Clunkers giveaway. Where would you rather put your money?
The fact is, we don’t have any investable money -- not just in theory, but in fact, since it would have to come out of household savings. A CNBC-type economist would probably point out that Americans have begun to save like crazy. We don’t doubt it, since that is exactly what debt deflations such as the one we are currently experiencing cause households to do. But those savings have in fact already been pledged ten times over to pay for an increasingly State-run future that is long on promises and short on revenues. The mirage of savings vanishes entirely when you consider that Americans will soon be on the hook for a trillion-dollar health care boondoggle; for several times that sum for a bank-system bailout that cannot possibly succeed; and for who-knows-how-much for a Social Security system whose costs had far outstripped affordability even when the U.S. economy was booming.
A no-nonsense economist from the Austrian School would probably view the situation as hopeless, looking out 10-15 years. Where, he might ask, will the savings come from to build the ultra-modern factories needed to keep America in the game? Indeed. So intent is President Obama on taxing away the average middle-class household’s already meager savings that we won’t have enough left over, even, to ramp up capacity in the tropical-drink parasol niche. Meanwhile, with the possible exception of Boeing, we cannot think of a single American company with the guts to build a big new factory in this country to take on competition in heavy manufacturing from Asia, India and Brazil.
It didn’t have to end this way. If Americans had been ants rather than grasshoppers from the 1970s on, favoring capital investment over consumption, we would now be producing cars that could be profitably exported to the rest of the world. Instead, we continue to export jobs with no end in sight while CNBC-type economists get revved up about America’s supposed productivity gains. They tell us that recession is making us lean and mean, but where’s the payoff? Here the Austrians are most clear, for they place no special value on productivity other than what it begets us in higher real wages and increased output. By that measure, the supposed productivity gains of the last twenty years have earned us nothing. We are deeper in hock to the world, deeper in hock to ourselves, and all we have to show for it is bigger homes, bigger cars, and much bigger government. If those are the fruits of capitalism, then perhaps the time is right for Mr. Obama’s brand of eurocratic socialism.
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-- Posted Thursday, 3 December 2009 | Digg This Article | Source: GoldSeek.com